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Taxation in Senegal
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Business Taxation in Senegal

The corporate income tax in Senegal is levied at 35% of net taxable income. Capital gains are taxed at the full corporate rate, but payment can be deferred if the gains are re-invested within a period of three years. The withholding tax, assessed at a rate of 16%, is deductible from corporate tax.

The value added tax (TVA) is a non-cumulative tax which is levied on sales of goods and services at progressive rates ranging from 10 to 34%. The business franchise tax is applied to a composite base, at a maximum rate of 5% of the fixed tax of up to CFA150,000, with modifications depending upon the nature and location of the business. A real estate tax of 15% of taxable income is also levied against properties subject to corporate tax. A payroll tax, ranging from 3 to 6%, is levied against the sum of both local and expatriate salaries.

Foreign corporations in Senegal are taxed only on Senegal-source income. Businesses that are centred externally and are without permanent establishment in Senegal are subject to a tax at a rate of 35% of net revenues. Foreign companies with branches in Senegal are subject to a 10% withholding tax on profits that have not been reinvested in Senegal. Senegal also has a minimum tax of CFA500,000 for all companies, resident and non-resident.

Tax incentives are automatically granted to investment projects meeting the following criteria:

• investors who use local resources for at least 65% of their inputs within a fiscal year are afforded exoneration from minimum personal income tax and business licence tax;

• enterprises that locate in less industrialised regions of Senegal benefit from exoneration of the lump sum payroll tax of 3%;

• priority status companies are given exemptions from various taxes, including exemptions from import taxes and duties for up to three years, exemption from franchise tax for up to five years, exemption from minimum profits tax on income, and exemptions from tax on employee salaries.

The investment code also provides exemptions from income tax, other taxes, and duties, which are to be phased out progressively over the next few years. Other tax incentives include the right to remit income and capital, and the opportunity to participate in government contracts.




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